Equiduct starts trading, seeks passive order flow

Equiduct Trading, the pan-European regulated market operated by Börse Berlin, has reported a successful launch of its trading platform.

“We have been live for a couple of weeks, and now we are concentrating on building up liquidity to meaningful levels,” Artur Fischer, joint-CEO, Equiduct Trading, told theTRADEnews.com.

The platform was originally due to launch at the end of 2008 but adverse market conditions and lack of member readiness held back the platform’s plans.

Equiduct has started trading FTSE 350 stocks and will add French, Dutch and Belgian stocks within the next couple of months. German stocks will be added when SIX x-clear, a Swiss clearing house, establishes its connection to the platform in the summer. By the end of its rollout, Equiduct will offer trading around 650 European blue chip stocks. Knight Equity Markets International, a division of US agency brokerage Knight Capital, has already executed on Equiduct, using J.P. Morgan’s GlobeClear as its general clearing member.

According to Fischer, the platform already has flow from market makers and algorithmic traders, but needs passive flow to start building up significant volumes on HybridBook, its main order book.

“We are working towards getting the right combination of market participants on the platform,” said Fischer. “We need the passive flow – both institutional and retail – to execute against the high frequency flow and we have some of these types of members preparing to connect to the platform in due course.”

PartnerEx, the firm’s bilateral trading service, has also gone live. This allows users to trade at Equiduct’s proprietary volume-weighted best bid and offer (VBBO) benchmark and enables market makers and flow providers to forge direct trading agreements with one another on the platform. The VBBO consolidates trading data across seven of the most liquid European trading venues and calculates the best price for a particular stock at the time.